Cole Hamels and the bigger picture
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Cole Hamels and the bigger picture
Matt Gelb
If indeed the Phillies have extended an offer of six years to Cole Hamels, as reported by numerous national outlets, a deal could be close. The sticking point, ever since spring training when the Phillies insisted on a Jered Weaver-type contract, has always been length.
John Boggs, Hamels' agent, has posited that his client be paid like an elite pitcher. In actuality, he was demanding the Phillies show a commitment worthy of an elite pitcher. They gave five years to a 32-year-old Cliff Lee and that immediately set the bar.
So, 11 days before a mythical deadline, the two sides may have finally reached common ground. The Phillies were always willing to pay Hamels an annual salary commensurate with their other aces, Roy Halladay and Lee. It will probably take something in the $24 million range yearly.
How would adding a salary like that affect the bigger picture? If anything, it increases the urgency to creep under the luxury tax threshold of $178 million in 2012. That would necessitate salary dumps like Shane Victorino, Placido Polanco and Joe Blanton.
More on that later.
If $24 million is Hamels' figure, the Phillies would commit $68 million to three pitchers in 2013 and approximately $137 million to 10 players for 2013. That is using average annual value (AAV) of contracts, the metric for accounting luxury tax commitments. (It is also assuming the Phillies exercise a $5 million team option on Carlos Ruiz.)
The Phillies have long maintained they do not want to pay a tax. (When Boston and New York are attempting to crawl under the limit, you know it's a big deal.) They avoided it by less than $1 million in 2011 and are most definitely over the $178 million limit in 2012. In addition to AAV for all uniformed players, there are other expenses that factor into the math. A boatload of injuries have forced the Phillies to sink a great deal of money into the disabled list in 2012. All of that goes toward luxury tax calculations.
If it's hard to see the Phillies staying under in 2012, it's nearly impossible to envision for 2013. The limit stays at the same level, $178 million, and Hamels would have a significant raise. (Even if the contract is backloaded in actual dollars, which it likely will be, the only important number is AAV.) Start at $178 million, subtract the typical $14 million in other expenses, then the $137 million for current commitments and that leaves $27 million for 15 (!) players. Heck, Hunter Pence could command about $14 million of that through arbitration.
But 2013 is the most logical season to surpass the luxury tax limit. If the Phillies can stay under in 2012, they would be taxed 17.5 percent in 2013 for every penny over and subject to fewer revenue sharing payouts. In 2014, the limit increases to $189 million. Once a team returns to non-offending status, the slate is wiped clean.
Penalties for repeat offenders, however, are punitive. If the Phillies go over in 2012, they are taxed at a 20 percent rate this year, then at 30 percent if over in 2013.
It's unclear how far above the threshold the Phillies currently are. The official calculations are not done by Major League Baseball until after the postseason. At opening day, The Inquirer roughly estimated a $184 million payroll for luxury tax purposes.
That's where salary dumps enter the picture. Victorino, Polanco and Blanton are impending free agents. It's unlikely any returns to Philadelphia. They are rental players in possible trades and would not command top prospects. So the Phillies could simply ask for salary relief from acquiring teams. Victorino's tax hit is $7.3 million, Polanco's is $6 million and Blanton's is $8 million. Prorated for two months, two of those players could save the Phillies almost $6 million in 2012 if dealt.
Save the money now, and there is less reluctance to be frugal in 2013. The wheels are put in motion with a Hamels contract. With 11 days, there appears to be real progress.
Have a question? Send it to Matt Gelb's Mailbag.
Its hard to believe you are advocating the same long term problems RAJ has created . Hamels is the single best way to get the Phils back into contention next year. They have got to get quality everyday players at a least a couple positions . Ham els can only pitch every four or five days in the meantime the Phils lose a lot of the games because they can't score.
Who knows if Hamels is going to be the same over the next 6 years .The Phils are in last place without him and are uninteresting to watch with no power hitters.
The days of Utley and others are over. They need some young talent and I don't mean prospects and now.— gardner
Comment removed.- @gardner -- in a perfect world, Phils would rebuild around Hamels, Lee and Ruiz.... in a perfect world, the rebuilder would need to be competent (not Amaro), and would not still be hamstrung after 2013 by oversized contracts to underperforming players like Howard, Papelbon, Rollins...— warbiscuit
- I have maintained that the maximum length of a contract for professional athletes should be 3 years. This is designed to keep them hungary and ensure that the team is not paying them for time they are injured as they get older (e.g. Howard, Utley, Vicks, etc.).— BobSG
- This series with the Giants is huge.
They are one of the top teams in the NL and my pick to go to the WS. If the Phils sweep or take 2 out of 3 they're still a dark horse. If they lose this series- at home - its all over, and I hope big changes will take place starting at the top.— Cameiros - Your post is a few weeks too late. It's been all over for a while now and I can't imagine the Phillies scoring against SF. — jtj06
- Just thinking logically....
Cole Hamels will be 29 in December.
He would be 39 if he got a 10 year contract in free agency.
That would be the a career for him.
He could hold out for free agency and probably get a $200M + payday for 9 or 10 years.
Sign for 6 years now and he would be negotiating again at age 35.
Hamels has made quite a few million already. He won't be hurting if he never signed another contract.
Considering that, he would not be taking a big risk waiting for free agency.
He holds all the cards.
I do not think he will sign and the Phillies will have to trade him.
In free agency, the Phillies will not be competetive or willing to commit to a lenghty contract with the Dodgers, Angels, BoSOX, Yankees, Marlins or Rangers.— candidly - 43 million comes off the books between Hamels, victorino, blanton, thome, polanco, contreras, qualls. etc
if you reinvest 25 of that into Hamels, you have enough (after a few arbitrations--let's say 5 million) to get a good bullpen arm or two and, a third basemen. Unfortunately, it seems difficult to get both a 3b and cf with hamels. but I sure hope Hamels signs.
the reality is you might have some minimum salary vets/rookies to be filling the bench, and hoping that year 2 helps with 2 or 3 of the bullpen youngsters.
I wonder---and I may be way off here--could galvis play 3b, and then use your remaining $ to sign a Cf. He picked up 2nd very quickly--i would sometimes forget it wasn't his position during his minor league career.
Also, I think signing Hamilton is a mistake: you are looking at another huge contract which will hurt more than help 2-3 years down the road.— kgood - Here's the whole problem with the "Phillies must sign Hamels at all costs discussion", he isn't that good. Yea I know he's young, but he isn't that good. He isn't elite. He hasn't won Cy Young. His career ERA isn't under 3, his season ERA isn't under 3. He has 10 CG, in his career. He has more than 200k is a season only once.
He's a good pitcher in a low offense league. He's Matt Cain's older, better looking clone.
If you can Deal him to Texas for Micheal Olt do it. Starting pitching is not the premium it was in the steroid era. Now the premium is SLG and SLG is available for less than starting pitching yet everyone is lobbying for starting pitching.
Make a move for David Wright, make a move for Curtis Granderson, make a move for Josh Hamilton. All are going to come cheaper than 6and130/— JoeinSouthPhilly - It isn't the 1970s. Hamels' numbers are right up there with any of the previous big $$$ free agent signings. He has a much better ERA than Cliff Lee. His ERA is better than Sabathia's, Verlander's. It's slightly higher than Cain and Lincecum's, but he's a lefty (normally gets you a premium) and pitches in a hitter friendly park. His rate and ratio stats are super and consistent. He took all the post season awards in 2008 and actually has done better than that over the 2010-11 post seasons. He is as elite and elite gets. — jtj06
- You guys are awful tough on guys like Rollins, Howard and Utley, IMO, they are the backbone of the team. They have had some injuries, so now they suck? You guys are ungrateful Frontrunners! This team, as assembled has earned the right to fight for the wild card. If they fall short, once is six years of missing the playoffs is still a pretty good run. I would not let Victorino go either, he is a very good centerfielder, and he can hit.— Paul SoTX
- Trade him now! Go test the market Cole!
- @— Paul SoTX. I thank all those guys for bringing a Championship to Philly. This is sports, it's what have you done for me lately. Again, I appreciate what they WERE, but NOW they suck! Move on. The Future is comming....— shady24
- I hope they sign Cole even though I feel 6 years is risky. Victorino is just as important to Phills. They do not have a replacement for Shane. Phills cannot go with Mayberry. Not bad defensively but not Shane. JMJ is very poor against righthanders a 210 hitter. Shane has not had a good year but your dismissing the previous 5.— Don w
